Leases VS. Tenant-at-Will: When Do You Use Both?

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If you own a property and worked with a property manager before, you may have heard of these terms already: tenant-at-will and leases. Lease being the common has been used to outline the list of agreements between the tenant and the landlord.

 

Why Written Agreements Matter

No matter which arrangement you go with, committing the terms to paper is crucial. Whether you’re a landlord or a tenant, a written agreement lays everything out clearly—expectations, responsibilities, rent, timelines, and rules.

Without things in writing, misunderstandings can crop up faster than weeds in the front yard. It’s not just about keeping everyone honest; it’s about making sure everyone’s on the same page if questions or issues come up down the road. From security deposits to move-out dates, a written document gives you something to refer back to so there’s no guessing—or arguing—about what was agreed on. In this article, we will discuss more tenancy-at-will and leases together with their pros and cons.

 

What is tenant-at-will?

 

 

Tenancy-at-will is a written agreement between the landlord and the tenant. One good example of this is when a landlord gives you a permission to stay in the property WITHOUT a lease agreement.

 

Written vs. Oral Agreements: Key Differences

When it comes to leases and tenancies-at-will, the formalities can differ quite a bit. Leases—think your standard one-year apartment agreements—are always required to be in writing. This helps protect both landlord and tenant by clearly outlining expectations and responsibilities over a defined length of time.

On the other hand, tenancies-at-will are much more flexible. These month-to-month arrangements can be set up in writing or can even be agreed upon with a simple handshake (yes, a verbal agreement counts, though putting things in writing is always safer for both parties). The main takeaway: if there’s a set term, get it in writing; if it’s a more open-ended month-to-month situation, you have options.

 

Pros and cons of lease and tenant-at-will

 

 

If the lease expires and the landlord didn’t do the lease agreement, that would automatically be a tenant-at-will. It’s not a situation we want most landlords to be in because we want to be able to have a consistent income.

 

Why Landlords Should Consider Other Factors Before Deciding

Of course, while these are some of the key differences, deciding between a lease and a tenancy-at-will isn’t always so simple. Every rental situation can have its own quirks—whether it’s the location of the property, the local rental market trends, or even the unique relationship you have with your tenants.

For example, some landlords may want more flexibility if they’re considering selling the property soon, or need to accommodate changes in their own living arrangements. Others may need stability—think of covering mortgage payments or keeping a steady cash flow.

Additionally, factors like tenant history, property type, and local regulations can impact which agreement will work best. Before making your choice, it’s a good idea to weigh these aspects so you can find the best fit for your situation.

 

Filling Vacancies: Lease vs. Tenancy-at-Will

When it comes to vacancies, leases and tenancies-at-will have some important differences worth noting. With a lease, both the landlord and the tenant are tied to a fixed term—meaning, if a tenant decides to leave before their lease ends, they’re often still responsible for paying the remainder of their rent unless the landlord finds a new occupant or specific conditions are met. This can give property owners a sense of stability, knowing they’ll continue receiving rent or at least have some recourse if someone tries to leave early.

On the other hand, a tenancy-at-will runs on a month-to-month basis. Either party can end the agreement with proper notice—typically 30 days. While this offers plenty of flexibility, it also means landlords might have less warning before a unit becomes empty, leaving them scrambling to fill the spot quickly. That unpredictable turnover is why many owners prefer having a solid lease in place, so they don’t find themselves unexpectedly searching for a new tenant at the drop of a hat.

 

Understanding Cure Rights for Tenants

Another important factor to consider when comparing leases and tenancy-at-will (TAW) is how “cure rights” work for tenants who fall behind on rent.

Cure rights refer to the opportunity a tenant has to pay overdue rent and avoid eviction. Here’s how they differ between the two arrangements:

• Tenancy-at-Will (TAW): If a tenant misses a payment, the landlord can issue a 14-day notice to terminate the agreement. However, the tenant can “cure” or pay what’s owed during this period and remain in the property—but this right to cure is usually limited to once every 12 months. So, if a tenant is late again within the same year, it’s up to the landlord to decide whether to accept late payment and reinstate the tenancy.
• Lease: Unless the lease specifically says otherwise, tenants generally have the right to cure each time they receive a late rent notice. That means, with a typical lease, a tenant could be late multiple times, pay what’s owed after each notice, and keep their tenancy going. This can be tougher on landlords, so some include a clause in the lease that says, for example, if the tenant is late more than two or three times in a year, it counts as a significant violation.

Knowing these details can help both landlords and tenants better understand what to expect if there ever is a late payment.

 

But sometimes, we put some delinquent tenants in a tenant-at-will for a short time frame because it’s easier for us to also state, “Okay, you have to leave and you have your 30 days notice,”  Whereas if there’s a lease, we have them until it expires.

 

Early Move-Out: Lease vs. Tenant-at-Will

With a traditional lease, both landlords and tenants are entering into a fixed-term agreement—think “locked in” for the length of the lease. If a tenant decides to move out before their lease officially ends, they’re generally still on the hook for the remaining rent unless the landlord is able to re-rent the property or otherwise releases them from that obligation. This setup acts as a safety net for landlords, making sure there’s some financial protection in case of unexpected vacancy.

On the other hand, with a tenancy-at-will, there’s much more flexibility—but also less long-term security. Tenants can choose to leave with just a standard 30-day notice, without worrying about being responsible for the rest of the year’s rent. While that makes moving easier for the tenant, it also means landlords might find themselves searching for new renters on short notice..

 

Notice Requirements for Termination Due to Non-Payment

Whether your tenant is on a lease or is considered tenant-at-will, the process for ending their tenancy because of unpaid rent is essentially the same. By law, you’ll need to provide at least 14 days’ written notice to the tenant if you’re terminating the agreement for non-payment.

This rule helps ensure both the landlord and tenant are on the same page, regardless of the specific type of rental agreement in place. It doesn’t matter whether you have a signed lease or are operating under a more flexible tenant-at-will setup—the 14-day notice applies in both cases.

 

Eviction Notice Periods: Lease vs. Tenant-at-Will

When it comes to ending a tenancy due to violations of the agreement, lease and tenant-at-will situations are handled very differently.

With a lease, you have much more control. If a tenant breaks a rule—say, they’re repeatedly throwing midnight parties or sneaking in a secret pet—you can usually give as little as 7 days’ notice to terminate the tenancy, depending on what’s written into your lease agreement.

In contrast, a tenant-at-will situation isn’t quite as flexible. Here, if you need to remove a tenant because of a lease violation (other than non-payment of rent), you’re required to provide 30 days’ notice (or a full rental period, whichever is longer). That means if you discover a violation on June 3rd, you might be waiting until August 1st before the tenant is actually required to move out. That’s almost seven weeks longer than what a lease may allow—definitely not ideal if you’re dealing with an ongoing issue.

For both leases and tenant-at-will agreements, the notice required for non-payment of rent is typically the same: a minimum of 14 days. But when it comes to handling violations of the tenancy agreement itself, a traditional lease gives landlords a much quicker path to resolution.

 

In addition, leases allow us to have a consistent amount of money. Although tenant-at-will is nice because you can increase your rent every single month if you give that notice. It’s very unlikely you would do it but you do have that flexibility, should you want to.

 

Limiting Late Payment Cures in a Lease

Now, when it comes to late rent payments, both tenants-at-will and lease agreements have their own set of rules—especially around what’s called “cure rights.” This simply means the window of time a tenant gets to catch up on overdue rent before facing termination.

With a tenant-at-will, the law provides a bit of leeway: the tenant usually gets one chance every 12 months to pay up and avoid termination after a 14-day notice. But after that first “free pass,” if late payments keep happening, it’s the landlord’s call whether to accept any late rent moving forward.

Leases, on the other hand, typically offer more flexibility to tenants. Unless you specifically limit it in the lease, a tenant can continue to pay late and “cure” the situation repeatedly after receiving notice—sometimes making things tricky for landlords trying to manage consistent cash flow.

Here’s how you can avoid the endless cycle of chronic late payment cures: Just include a clause in your lease that states if a tenant pays late, say, three or more times in a year, it’s considered a significant violation of the lease. This lets you set clear expectations and helps protect your bottom line—no more chasing after chronic late-payers month after month.

 

You might be looking to sell the property later on, and sell it as an owner-occupied. That is the type of situation where we might want to use the tenant-at-will because you’re able to get a tenant out easier and faster rather than having them in full time.

 

If you or anyone else you know is looking for a proactive property manager that can guide you on different situations, where a tenant-at-will might be beneficial for you, please think of Green Ocean Property Management, you get more than a property manager, you get peace of mind.